Carlisle Companies Inc.

04/24/2026 | Press release | Distributed by Public on 04/24/2026 12:46

Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
Carlisle Companies Incorporated ("Carlisle," the "Company," "we," "us" or "our") is a leading supplier of innovative building envelope products and solutions for more energy efficient buildings. Through our building products businesses, Carlisle Construction Materials ("CCM") and Carlisle Weatherproofing Technologies ("CWT"), and family of leading brands, we deliver innovative, labor-reducing and environmentally responsible products and solutions to customers through the Carlisle Experience. Carlisle is committed to generating superior stockholder returns and maintaining a balanced capital deployment approach, including investments in our businesses, strategic acquisitions, share repurchases, and continued dividend increases.
Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is designed to provide a reader of our financial statements with a narrative from the perspective of Company management. All references to "Notes" refer to our Notes to Condensed Consolidated Financial Statements in Item 1 of this Quarterly Report on Form 10-Q.
Executive Overview
Carlisle reported strong first quarter results despite challenges associated with the Middle East conflict, housing affordability, and weather. Our team executed with discipline against our Vision 2030 priorities, delivering diluted earnings per share of $3.10 and increasing operating margin by 30 basis points and adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA") margin by 50 basis points. Revenue of $1.1 billion was impacted by unfavorable winter weather conditions that constrained contractors' days on the roof throughout the quarter into early March. The quarter was shaped by three themes: our swift pricing response to oil-driven cost inflation, our disciplined execution in protecting margins, and our continued progress on innovation and other strategic priorities.
While the cost of our raw materials does not fully correlate with oil price fluctuations, the magnitude and increasing duration of elevated oil prices has impacted our petrochemical-linked raw material inputs. We have responded quickly to this cost inflation by announcing price increases across CCM and CWT along with freight surcharges to offset escalating freight rates.
At CCM, operating margin decreased 10 basis points to 24.3%, and adjusted EBITDA margin expanded 30 basis points year-over-year to 27.4% despite lower revenue, as volume headwinds were offset by productivity gains driven by the Carlisle Operating System ("COS"), procurement discipline, and selling and administrative cost controls. At CWT, operating margin increased 50 basis points to 5.9%, and adjusted EBITDA margins decreased 40 basis points to 15.2% due to lower volumes which was partially offset by the positive impact of operational improvements that continued to deliver measurable results, including footprint consolidation and expanded in-house polystyrene resin capacity.
The quarter also marked meaningful progress toward our Vision 2030 goal of driving value through innovation. Our new ThermaThin 7 polyiso insulation received both the People's Choice and Expert's Choice awards at the 2026 International Roofing Expo. Across the business, we are on track to launch many new products in 2026, reflecting strong momentum in our innovation pipeline.
As we move through 2026, we remain focused on integrating recent acquisitions, driving structural margin improvement through COS, and elevating the Carlisle Experience.
Summary of Financial Results
Three Months Ended
March 31,
(in millions, except per share amounts and percentages) 2026 2025
Revenues $ 1,052.1 $ 1,095.8
Operating income $ 180.3 $ 183.6
Operating margin 17.1 % 16.8 %
Income from continuing operations $ 127.7 $ 140.1
Diluted earnings per share from continuing operations $ 3.10 $ 3.13
Adjusted EBITDA(1)
$ 234.6 $ 238.4
Adjusted EBITDA margin(1)
22.3 % 21.8 %
(1)Refer to Non-GAAP Financial Measures in this MD&A for more information.
Consolidated Results of Operations
Revenues
(in millions, except percentages) 2026 2025 Change % Organic
Acquisition Effect
Exchange Rate Effect
Three months ended March 31
$ 1,052.1 $ 1,095.8 $ (43.7) (4.0) % (5.0) % 0.4 % 0.6 %
Revenues decreased in the first quarter of 2026, primarily due to lower sales volumes in our non-residential construction end-market resulting from the impact of adverse winter weather on shipment timing and the continuation of soft new construction activity.
Gross Profit
(in millions, except percentages) Three Months Ended March 31,
2026 2025
Change
%
Gross profit $ 363.2 $ 385.7 $ (22.5) (5.8) %
Gross margin 34.5 % 35.2 %
Gross margin decreased in the first quarter of 2026, primarily due to increased unit costs resulting from higher absorption of fixed costs on lower volumes.
Selling and Administrative Expenses
(in millions, except percentages) Three Months Ended March 31,
2026 2025
Change
%
Selling and administrative expenses $ 171.8 $ 194.0 $ (22.2) (11.4) %
As a percentage of revenues
16.3 % 17.7 %
Selling and administrative expenses decreased in the first quarter of 2026, primarily resulting from lower wage and benefit expenses of $12.1 million and lower acquisition-related costs and professional fees of $6.0 million.
Research and Development Expenses
(in millions, except percentages) Three Months Ended March 31,
2026 2025
Change
%
Research and development expenses $ 12.1 $ 10.7 $ 1.4 13.1 %
As a percentage of revenues
1.2 % 1.0 %
Research and development expenses increased in the first quarter of 2026, primarily due to higher new product development expenses. The increase in research and development expenses is consistent with a key pillar of Vision 2030 to drive innovation with a commitment to investing in the creation of new products and solutions that add value through advancements in sustainability and energy and labor efficiencies.
Interest
(in millions, except percentages) Three Months Ended March 31,
2026 2025 Change %
Interest expense $ 28.3 $ 14.8 $ 13.5 91.2 %
Interest income $ (8.9) $ (6.4) $ (2.5) 39.1 %
Interest expense increased in the first quarter of 2026, primarily due to higher long-term debt balances associated with the notes issued on August 20, 2025. Refer to Note 9 for further information on our long-term debt.
Interest income increased during the first quarter of 2026, primarily due to a higher invested cash balance compared to 2025.
Income Taxes
(in millions, except percentages) Three Months Ended March 31,
2026 2025
Change
%
Provision for income taxes $ 35.5 $ 34.9 $ 0.6 1.7 %
Effective tax rate
21.8 % 19.9 %
The provision for income taxes on continuing operations increased during the first quarter, primarily due to lower excess tax benefits from employee stock compensation, partially offset by lower pre-tax income.
The year-to-date provision for income taxes includes taxes on earnings at an anticipated rate of 23.2% and a tax benefit of $2.3 million from discrete activity primarily related to excess tax benefits from employee stock compensation, compared to an anticipated rate of 23.3% and a tax benefit from discrete activity of $5.8 million in the first quarter of 2025.
Segment Results of Operations
Carlisle Construction Materials
This segment produces a complete line of premium single-ply roofing products and warranted roof systems and accessories for the commercial building industry, including ethylene propylene diene monomer ("EPDM"), thermoplastic polyolefin ("TPO") and polyvinyl chloride ("PVC") membrane, polyisocyanurate ("polyiso") insulation, and engineered metal roofing and wall panel systems for commercial and residential buildings.
(in millions, except percentages) Three Months Ended March 31,
Organic
Acquisition Effect
Exchange Rate Effect
2026 2025
Change
%
Revenues
$ 758.1 $ 798.5 $ (40.4) (5.1) % (5.8) % - % 0.7 %
Operating income
$ 184.0 $ 194.8 $ (10.8) (5.5) %
Operating margin
24.3 % 24.4 %
Adjusted EBITDA(1)
$ 207.9 $ 216.5 $ (8.6) (4.0) %
Adjusted EBITDA margin(1)
27.4 % 27.1 %
(1)Refer to Non-GAAP Financial Measures in this MD&A for more information.
CCM's revenue decreased in the first quarter of 2026, primarily reflecting lower volumes due to the adverse winter weather and continued softness in commercial new construction activity.
CCM's operating margin was relatively flat and adjusted EBITDA margin increased in the first quarter of 2026, primarily due to the impact of lower sales volumes offset by lower selling and administrative expenses of $5.9 million driven by ongoing COS-led cost saving initiatives.
Carlisle Weatherproofing Technologies
This segment produces building envelope solutions that drive energy efficiency and sustainability in commercial and residential applications. Products include high-performance waterproofing and moisture protection products, protective roofing underlayments, fully integrated liquid and sheet applied air/vapor barriers, sealants/primers and flashing systems, roof coatings and mastics, spray polyurethane foam and coating systems for a wide variety of thermal protection applications and other premium polyurethane products, block-molded expanded polystyrene insulation, engineered products for HVAC applications, and premium products for a variety of industrial and surfacing applications.
(in millions, except percentages) Three Months Ended March 31,
Organic
Acquisition Effect
Exchange Rate Effect
2026 2025 Change
%
Revenues
$ 294.0 $ 297.3 $ (3.3) (1.1) % (3.0) % 1.4 % 0.5 %
Operating income
$ 17.3 $ 16.2 $ 1.1 6.8 %
Operating margin
5.9 % 5.4 %
Adjusted EBITDA(1)
$ 44.8 $ 46.3 $ (1.5) (3.2) %
Adjusted EBITDA margin(1)
15.2 % 15.6 %
(1)Refer to Non-GAAP Financial Measures in this MD&A for more information.
CWT's revenue decreased in the first quarter of 2026, primarily driven by lower sales volumes due to continued market softness in new construction activity, partially offset by revenue from the recent acquisitions of ThermaFoam and Bonded Logic.
CWT's operating margin increased and adjusted EBITDA margin decreased in the first quarter of 2026, primarily due to the impact of lower sales volumes partially offset by lower selling and administrative expenses of $9.0 million driven by lower acquisition costs of $4.2 million and savings from targeted restructurings.
Liquidity and Capital Resources
We believe that our current cash reserves, available credit facilities, and anticipated operating cash flows are adequate to meet our short-term projected business requirements for at least the next 12 months and our long-term financial requirements, including the repayment of outstanding principal balances on existing notes by their respective maturity dates.
Additional sources of liquidity may be obtained through access to the capital markets, subject to market conditions. The Company may consider such access for general corporate purposes that include the repayment of outstanding debt, additions to working capital, capital expenditures, investments in our subsidiaries, acquisitions, investments in third parties or the repurchase, redemption or retirement of securities, including our common stock. For further details regarding long-term debt, refer to Note 9.
Management retains discretion over the allocation of available cash and may deploy resources toward capital expenditures, acquisitions, strategic investments, dividends, or share repurchases.
Three Months Ended
March 31,
(in millions)
2026 2025
Net cash provided by (used in) operating activities $ (44.7) $ 1.8
Net cash provided by (used in) investing activities (28.0) (78.9)
Net cash provided by (used in) financing activities (268.0) (456.4)
Effect of foreign currency exchange rate changes on cash and cash equivalents (0.1) 0.2
Change in cash and cash equivalents $ (340.8) $ (533.3)
Operating Activities
Net cash used in operating activities for the first three months of 2026 was $44.7 million. Net cash provided by operating activities was $1.8 million for the first three months of 2025. This year-over-year change was primarily driven by higher working capital uses of $29.6 million and lower income from continuing operations, excluding non-cash reconciling items, of $14.6 million.
We typically deploy cash in the first quarter to settle year-end liabilities and build working capital ahead of the construction season. Compared to the first three months of 2025, we used $107.9 million more cash to settle other current liabilities, primarily reflecting a $125 million post-year-end settlement of an accrued tax-related liability. Excluding this tax-related payment, operating cash flow improved compared to the first three months of 2025 as we deployed $18.0 million less into accounts receivable due to timing of sales and collections, $20.0 million less into inventories due to improved inventory turnover, and $34.5 million less into accounts payable due to timing of expenses and payments.
Investing Activities
Net cash used in investing activities of $28.0 million for the first three months of 2026 primarily reflected capital expenditures of $28.3 million. Cash used in investing activities of $78.9 million for the first three months of 2025 primarily reflected the purchase of ThermaFoam for $52.9 million and capital expenditures of $29.0 million.
Financing Activities
Net cash used in financing activities of $268.0 million in the first three months of 2026 primarily reflected share repurchases of $250.0 million and cash dividend payments of $45.7 million. Cash used in financing activities of $456.4 million in the first three months of 2025 primarily reflected share repurchases of $400.0 million and cash dividend payments of $45.2 million.
Non-GAAP Financial Measures
EBIT, Adjusted EBIT, Adjusted EBITDA and Adjusted EBITDA Margin
Earnings before interest and taxes ("EBIT"), adjusted EBIT, adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA") and adjusted EBITDA margin are intended to provide investors and others with information about our performance and our segments' performance without the effect of items that, by their nature, tend to obscure core operating results due to potential variability across periods based on the timing, frequency and magnitude of such items. As a result, management believes that these measures enhance the ability of investors to analyze trends in our business and evaluate our performance relative to similarly-situated companies. This information differs from net income, operating income, and operating margin determined in accordance with GAAP and should not be considered in isolation or as a substitute for measures of performance determined in accordance with GAAP. Our and our segments' EBIT, adjusted EBIT, adjusted EBITDA and adjusted EBITDA margin follows. These non-GAAP financial measures may not be comparable to similarly titled measures reported by other companies.
Three Months Ended
March 31,
(in millions, except percentages) 2026 2025
Net income (GAAP) $ 127.7 $ 143.3
Less: Income from discontinued operations (GAAP) - 3.2
Income from continuing operations (GAAP) 127.7 140.1
Provision for income taxes 35.5 34.9
Interest expense 28.3 14.8
Interest income (8.9) (6.4)
EBIT 182.6 183.4
Non-comparable (gains) / losses and costs related to:
Acquisitions 0.4 6.8
Dispositions 0.1 0.1
Restructuring 2.4 0.1
Legal settlements (0.1) 0.2
Total non-comparable items 2.8 7.2
Adjusted EBIT 185.4 190.6
Depreciation 18.8 17.7
Amortization 30.4 30.1
Adjusted EBITDA $ 234.6 $ 238.4
Divided by:
Total revenues $ 1,052.1 $ 1,095.8
Adjusted EBITDA margin 22.3 % 21.8 %
Three Months Ended March 31, 2026 Three Months Ended March 31, 2025
(in millions, except percentages) CCM CWT Corporate CCM CWT Corporate
Operating income (loss) (GAAP) $ 184.0 $ 17.3 $ (21.0) $ 194.8 $ 16.2 $ (27.4)
Non-operating expense (income), net 0.1 (0.1) (2.3) (0.1) - 0.3
EBIT 183.9 17.4 (18.7) 194.9 16.2 (27.7)
Non-comparable (gains) / losses and costs related to:
Acquisitions - 0.2 0.2 - 4.4 2.4
Dispositions - 0.1 - - 0.1 -
Restructuring 1.1 1.3 - - 0.1 -
Legal settlements 0.1 (0.2) - - 0.2 -
Total non-comparable items 1.2 1.4 0.2 - 4.8 2.4
Adjusted EBIT 185.1 18.8 (18.5) 194.9 21.0 (25.3)
Depreciation 13.4 5.1 0.3 12.6 4.7 0.4
Amortization 9.4 20.9 0.1 9.0 20.6 0.5
Adjusted EBITDA $ 207.9 $ 44.8 $ (18.1) $ 216.5 $ 46.3 $ (24.4)
Divided by:
Total revenues $ 758.1 $ 294.0 $ - $ 798.5 $ 297.3 $ -
Adjusted EBITDA margin 27.4 % 15.2 % NM 27.1 % 15.6 % NM
Forward-Looking Statements
This report contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, about our expectations, plans, objectives, future financial performance and other matters that are not historical facts. You can identify these forward-looking statements by our use of words such as "anticipate," "believe," "continues," "estimate," "expect," "forecast," "foresee," "intends," "may," "plans," "project," "pursue," "should," "will" and similar expressions. We cannot guarantee that any forward-looking statement will be realized, although we believe that we have been prudent in our plans, estimates and assumptions. Such statements are made based on known events and circumstances at the time of publication and, as such, are subject in the future to unforeseen risks and uncertainties and to assumptions that may prove to be inaccurate. It is possible that our future performance may differ materially from current expectations expressed in, or implied by, these forward-looking statements due to a variety of factors, including:
•increasing price and product/service competition by foreign and domestic competitors, including new entrants;
•significant reliance on our key customers;
•damage to, or prolonged disruption of, our manufacturing facilities;
•technological developments and changes;
•the ability to continue to introduce competitive new products and services on a timely, cost-effective basis;
•our mix of products/services;
•increases in raw material costs that cannot be recovered in product pricing;
•domestic and foreign governmental and public policy changes including environmental and industry regulations;
•the ability of our customers to maintain appropriate labor levels under U.S. immigration laws, policies and practices;
•the ability to meet our goals relating to our intended reduction of greenhouse gas emissions, including our net zero commitments;
•threats associated with, and efforts to combat, terrorism;
•protection and validity of patent and other intellectual property rights;
•the identification of strategic acquisition targets and our successful completion of any transaction and integration of our strategic acquisitions;
•the cyclical nature of our businesses;
•the impact of information technology, cybersecurity, artificial intelligence or data security breaches at our businesses or third parties;
•the outcome of pending and future litigation, including product liability claims, and governmental proceedings;
•general industry and market conditions and growth rates, the condition of the financial and credit markets and general domestic and international economic conditions, including inflation, interest rate and currency exchange rate fluctuations, and tariffs;
•any conflict in the international arena, including the Russian invasion of Ukraine and war in the Middle East; and
•the other factors discussed in the reports we file with, or furnish to, the Securities and Exchange Commission from time to time.
Any forward-looking statement speaks only as of the date on which that statement is made, and we undertake no duty to update any forward-looking statement to reflect events or circumstances, including unanticipated events, after the date on which that statement is made, unless otherwise required by law. New factors emerge from time to time, and it is not possible for us to predict all of those factors, nor can we assess the impact of each of those factors on the business.
Carlisle Companies Inc. published this content on April 24, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on April 24, 2026 at 18:46 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]